XRP soars 22%, tops Solana amid battle with SEC
If Ripple, the payment network that uses XRP, soon wins its legal battle with the SEC, the coin could spike even higher. Until then, the lawsuit may weigh it down.
The price of cryptocurrency XRP (XRP), the token used for products developed by Ripple Labs, climbed 22% in 24 hours, thanks to a possible positive outcome over its lawsuit with the US Security and Exchange Commission (SEC).
On Monday, a Reuters report suggested a favorable turn for the blockchain payments company, seemingly resulting in a price increase for XRP.
XRP’s rise pushed its market cap back over $40 billion early Tuesday morning, though it dipped back below the $40 billion mark later in the day as the digital asset gave up some of its gains. Still, XRP is now at the sixth spot in market cap, ahead of Cardano (ADA) and Solana (SOL).
XRP was trading at $0.813906 per coin at the time of this writing.
Is XRP a buy as the lawsuit winds down?
What is XRP?
XRP is the native token for Ripple Labs, a blockchain payments firm founded in 2012 and based in San Francisco, California. The company develops and distributes an open-source, decentralized payments protocol called the XRP Ledger.
XRP can process 1,500 transactions per second with a ledger settlement of four seconds. Compare that to Ethereum (ETH), which takes an average of 13 seconds, and Bitcoin (BTC), which can take around 10 minutes.
What’s happening with the SEC?
The SEC filed a lawsuit against Ripple and two of its executives in December 2020, alleging that the company raised over $1.3 billion through an unregistered offering of its digital asset XRP.
The SEC’s complaint says that Ripple cofounder and former CEO Christian Larsen and Ripple’s current CEO Bradley Garlinghouse raised capital to finance the company’s business and failed to register their offers and sales of XRP, which is a violation of federal securities laws.
Most recently, two memos have come under question. The documents are from 2012, when an outside law firm analyzed the legal issues that could arise from the launch of the new token. According to Reuters, the SEC argues that the memos show that Ripple and Larsen were fully aware of the risk that XRP would be viewed as a security under federal law. But Ripple and Larsen say the documents show that Ripple’s lawyers ultimately concluded its tokens were not securities.
The issue now is whether the documents should be made public. Ripple argues the memos contain proprietary information.
The lawsuit is expected to conclude sometime in 2022.
Where XRP ranks now compared to the top 10 digital coins
XRP’s move Tuesday made it the sixth-largest cryptocurrency by market cap, lifting it above Cardano’s ADA token and Solana’s SOL.
Here are the top ten cryptocurrencies ranked by market cap at the time of this writing.
| Name | Price | Market cap |
|---|---|---|
| Bitcoin (BTC) | $43,503.52 | $820,927,184,506 |
| Ethereum (ETH) | $3,074.06 | $366,812,066,499 |
| Tether (USDT) | $1.00 | $77,971,472,718 |
| Binance Coin (BNB) | $410.33 | $67,532,207,121 |
| USD Coin (USDC) | $1.00 | $51,574,298,504 |
| XRP (XRP) | $0.8324 | $39,518,553,488 |
| Cardano (ADA) | $1.16 | $38,674,458,709 |
| Solana (SOL) | $111.53 | $35,188,335,634 |
| Terra (LUNA) | $56.84 | $22,673,748,918 |
| Avalanche (AVAX) | $86.85 | $21,151,982,185 |
*Prices were accurate at the time of this writing and according to data from CoinMarketCap.
Is XRP a buy?
XRP hit an all-time high of $3.40 last April and saw another significant runup in August. The coin is now trading at around 75% below its top.
If the SEC lawsuit ends soon and in Ripple’s favor, the coin could spike sharply higher. Until then, the lawsuit could continue to weigh down the token’s price.
In the short term, Finder’s experts have a bearish view of the price trajectory of XRP.
At the time of publication, Matt Miczulski owned BTC and ETH.
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